January 7, 2022

The Complete Guide for Pag-IBIG Housing Loan

When buying a house and lot for sale or a lot only, a home loan should be considered.

A house loan is a kind of financial assistance or simply borrowing money with interest from banks and government organizations for a specified period of time. For the most part, home loans are used to acquire, build and remodel homes, as well as extend them and refinance existing housing loans.

Currently, there are six categories of house loans on the market: home purchase loans, home building loans, home repair loans, home extension loans, home equity loans, and home refinancing loans.

A home purchase loan application is for those who want to buy a new house and lot or even a condominium unit, whereas a home building loan is for people who have bought or have an existing lot and want to build a house based on their preferences and requirements.

A home renovation loan, on the other hand, is for homeowners who want to repair or remodel their residential house, whilst a home extension loan is for people who want to add extra space or extend their property with another room.

A home equity loan is for those who need to borrow money against the value of their house. The money obtained from this sort of loan is utilized for costs or investments such as starting a business or supporting their family’s necessities.

Lastly, a home loan refinance is simply converting from a fixed-rate to a variable-rate mortgage or vice versa in order to save money in the long term.

What is Home Development Mutual Fund (HDMF) or Pag-IBIG Fund?

In the Philippines, there are four types of home loans based on financing schemes that cater home purchase loans, home building loans, home repair loans, home extension loans, home equity loans, and home refinancing loans and one of them is Pag-Ibig Housing Loan.

Pag-IBIG housing loan is offered by the government agency Home Development Mutual Fund (HDMF) or commonly known as Pag-IBIG Fund. The HDMF was founded in response to the demand for a national savings program as well as affordable housing finance for Filipino workers. HDMF was founded on June 11, 1978, by Presidential Decree No. 1530, principally to fulfill these two fundamental but equally significant requirements. The Fund was controlled by two organizations under the stated law: the Social Security System, which handled the funds of private employees, and the Government Service Insurance System, which handled the funds of government employees.

President Gloria Macapagal-Arroyo signed Republic Act No. 9679 or the Home Development Mutual Fund Law of 2009 on July 21, 2009, in recognition of HDMF’s efforts throughout the years and the need to further improve its capabilities as the country’s largest source of housing loans to date.

Those covered by SSS and GSIS as well as uniformed personnel of the AFP, BFP, BJMP, PNP, and OFWs or foreign-based Filipino employees are all required to join the Pag-IBIG Fund under the new HDMF legislation. With Republic Act 9679, Pag-ibig housing loan benefits are now more accessible than ever to Filipino employees.

Pag-IBIG is an acronym which stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industria at Gobyerno. Since its founding, the Pag-IBIG Fund has continued to engage with these four sectors of society, bringing them together to create a successful savings program that would provide enough housing for fund members.

Pag-Ibig Fund currently supports Pag-Ibig Housing Loan, Pag-Ibig Home Equity Appreciation Loan or HEAL, Affordable Housing Loan for Minimum Earners, Home Saver Programs, and Properties for Sale or Acquired Assets. Among all these loan types, the most commonly used is Pag-Ibig Housing Loan.

Pag-IBIG Housing Loan

Pagibig fund provides Pag-IBIG home loans, which let borrowers borrow up to P6 million at low-interest rates and with extended payback terms.

PURPOSE

Pag-IBIG Housing Loans may be used to fund the following items and/or combinations of housing loan borrowers :

A completely built residential lot or neighboring residential lots with a combined area of no more than 1,000 square meters
To purchase an apartment, townhouse, or condominium unit ;
Units that have been previously owned or that are brand new
Pag-IBIG Fund mortgaged property; or
Townhouses, row homes, condominium units, and adjoining houses and lots
Residential unit construction pr completion on the principal borrower or his or her relative’s residential property;
Improving your home;
Existing housing loan refinancing, provided that the principal borrower has been paying the amortizations of the said loan on time and without any payments made beyond thirty (30) days past due for the last six months from the date of application.

ELIGIBILITY

You must be an active member who has contributed for at least 24 months.
The member must be no older than 65 years old at the time of application and no older than 70 years old at the time of maturity.
Has the legal authority to buy and encumber real estate.
Has no Pag-IBIG housing loan that has been foreclosed, canceled, repaid, or relinquished.
Payment for an existing Pag-IBIG Housing account or Short Term Loan should have been updated.

LOANABLE AMOUNT

You can borrow up to Php 6 million through the program. Loan eligibility is determined by your ability to pay or loan-to-loan value ratio, whichever is lower. Housing loan borrowers may apply the loanable amount to the following purposes:

Purchase a residential lot, a house with a lot, or a condominium unit;
Purchase a completely developed residential lot or neighboring residential lots comprising no more than 1,000 square meters.
Finish or build a residential property or unit held by the principal borrower or a family that might be a co-borrower;
To renovate or enhance the principal borrower or relative’s home and property, which are now secured by a Contract-to-Sell (CTS) or Deed of Conditional Sale (DCS) between Pag-IBIG Fund and the buyer.
Refinance an existing housing loan;
Purchase a residential land or unit at the expense of title transfer.

HOW TO APPLY

A Pag-IBIG Housing Loan application can be submitted at any Pag-IBIG Fund branch or through the certified partner-developer from whom you will acquire your property with a fully completed application form and the necessary attached documents below:

FROM BORROWER

Two copies of Housing Loan Application with recent ID photo of borrower and/ or co-borrower if applicable
Proof of Income

For Locally Employed

One original copy of the Certificate of Employment and Compensation (CEC), reflecting the gross monthly income and monthly allowances or monthly monetary benefits received by the employee, is officially signed by the employer’s authorized signatory. The signature of the employer’s authorized signatory must be represented in the system-produced CEC.
One copy of the Latest Income Tax Return (ITR) for the year immediately before the date of a loan application, with attached BIR Form No. 2316, properly recognized by the BIR or authorized agent of the employer.
One original certified copy of the Employer’s name and signature on the employee’s payslip from the past three months before the loan application date.

Do take note that for government workers who will be paying their loan amortization by salary deduction an original copy of one month’s Payslip, within the previous three months before the date of the loan application, must be supplied along with CEC or ITR, as indicated above.

For Self-employed

ITR, Audited Financial Statements, and Official Receipt of tax payment from bank supported with DTI Registration and Mayor’s Permit/Business Permit
Commission Vouchers reflecting the issuer’s name and contact details for the last 12 months
Bank Statements or passbook for the last 12 months in case income is sourced from foreign remittances, and pensions.
Copy of Lease Contract and Tax Declaration if income is derived from rental payments.
Certified True Copy of Transport Franchise issued by an appropriate government agency such as LGU for tricycles, LTFRB for other PUVs.
Certificate of Engagement issued by the owner of the business
Other documents that would validate the source of income

For Overseas Filipino Workers :

Employment Contract or Overseas Employment Certificate between employee and employer; or
POEA Standard Contract
Certificate of Employment and Compensation
CEC written on the Employer/Company’s official letterhead; or
CEC signed by the employer (for household staff and similarly situated employees) supported by a photocopy of the employer’s ID or passport
Income Tax Return filed with Host Country/Government

All documents for Overseas Filipino Workers such as contracts and Overseas Employment certificate should be written in English.

One valid ID with a back-to-back photocopy of Principal Borrower and Spouse, Co-Borrower, and Spouse, Seller and Spouse and Developer’s Authorized Representative and Attorney-In-Fact, if applicable.

FROM SELLER

Transfer Certificate of Title (TCT) (latest title, Certified True Copy). For Condominium Unit, present TCT of the land and Condominium Certificate of Title (CCT) (Certified True Copy).
Updated Tax Declaration (House and Lot) and Updated Real Estate Tax Receipt
Vicinity Map/Sketch Map leading to the Property subject of the loan.

You may also take the first step in applying for a loan by visiting Virtual Pag-Ibig. To apply via Virtual Pag-Ibig you are requested to prepare the following:

1. LOAN APPLICATION FORM

Duly accomplished Housing Loan Application with your “1×1” ID photo

• For Principal borrowers, please click here to download your Housing Loan Application form (HLA HQP-HLF-068)

• For Co-borrower, please click here to download your Housing Loan Application form (HLA HQP-HLF-069)

If you require assistance regarding the application form, you may check the GUIDE TO FILLING OUT AN APPLICATION FORM:

• Front Page

• Back Page

2. PROOF OF INCOME

For Locally Employed

One original copy of the Certificate of Employment and Compensation (CEC), reflecting the gross monthly income and monthly allowances or monthly monetary benefits received by the employee, is officially signed by the employer’s authorized signatory. The signature of the employer’s authorized signatory must be represented in the system-produced CEC.

One copy of the Latest Income Tax Return (ITR) for the year immediately before the date of a loan application, with attached BIR Form No. 2316, properly recognized by the BIR or authorized agent of the employer.

One original certified copy of the Employer’s name and signature on the employee’s payslip from the past three months before the loan application date.

For Self-employed

ITR, Audited Financial Statements, and Official Receipt of tax payment from bank supported with DTI Registration and Mayor’s Permit/Business Permit
Commission Vouchers reflecting the issuer’s name and contact details for the last 12 months
Bank Statements or passbook for the last 12 months in case income is sourced from foreign remittances, and pensions.
Copy of Lease Contract and Tax Declaration if income is derived from rental payments.
Certified True Copy of Transport Franchise issued by an appropriate government agency such as LGU for tricycles, LTFRB for other PUVs.
Certificate of Engagement issued by the owner of the business
Other documents that would validate the source of income

For Overseas Filipino Workers:

Employment Contract or Overseas Employment Certificate between employee and employer; or
POEA Standard Contract
Certificate of Employment and Compensation
CEC written on the Employer/Company’s official letterhead; or
CEC signed by the employer (for household staff and similarly situated employees) supported by a photocopy of the employer’s ID or passport
Income Tax Return filed with Host Country/Government

All documents for Overseas Filipino Workers such as contracts and Overseas Employment certificates should be written in English.

3. ONE VALID ID WITH SIGNATURE

Photocopy or scanned copy of one VALID IDENTIFICATION CARDS such as the following:

Passport, issued by the Philippine or Foreign Government
Professional Regulation Commission ID
Social Security System Card
Government Service Insurance System eCard
Government Office and GOCC IDs such as AFP ID or Pag-IBIG Loyalty Card
Integrated Bar of the Philippines ID
Overseas Workers Welfare Administration ID
Seafarer’s Identification and Record Book
Company ID
Driver’s License
Senior Citizen Card
Postal ID
Voter’s ID
Overseas Filipino Worker ID

4. SELFIE PHOTO

Selfie photo showing your ID Card

Virtual Pag-Ibig is Pag-IBIG Fund’s 24-hour online service where you may safely and quickly use Pag-IBIG Fund’s services from any smartphone or computer with an internet connection at any time and any location.

Also, Virtual Pag-Ibig has chat support known as Lingkod Pag-IBIG customer care representatives who are ready to answer questions and concerns.

INTEREST RATE

Currently, the interest rates on Pag-IBIG Housing Loan are at their lowest. With this housing loan, you may get a property at a reasonable price with low rates.

Choosing a repricing interval determines your loan’s interest rate and repayment schedule. Listed below are Pag-Ibig Housing Loan rates effective of 1 July 2021:

1-Yr Fixing – 5.750%

3-Yr Fixing – 6.250%

5-Yr Fixing – 6.500%

10-Yr Fixing – 7.250%

15-Yr Fixing – 7.875%

20-Yr Fixing – 8.500%

25-Yr Fixing – 9.125%

30-Yr Fixing – 9.875%

HOW TO RECEIVE THE LOAN AMOUNT?

Get the requirement checklist via the Pag-IBIG FUND website or their nearest branch.
Submit the housing loan application at JELP Business Solutions Building, Shaw Blvd., Mandaluyong City, or the nearest Pag-IBIG branch near you.
Receive the Notice of Approval (NOA) and Letter of Guaranty(GOA) after 17 working days at Servicing Department 2/F JELP Business Solutions Building, Shaw Blvd., Mandaluyong City.
Borrowers are given 90 days to accomplish the NOA requirements needed to release the loan proceeds.
Receive loan proceeds.
A month after the check date, the borrower will start paying the monthly amortization.

PAYMENT

Pag-IBIG Housing Loan can be paid by a variety of simple methods, including:

An agreement with your employer, if you are working, to collect your monthly payments, which will be sent to the Pag-IBIG Fund
Payment via cheque with a future date
With the Pag-IBIG Fund’s partner bank wherein an Auto Debit Arrangement has been set up.
Through Virtual Pag-IBIG
Aside from Virtual Pag-IBIG, you can also pay your monthly amortizations in person at any Pag-IBIG Fund branch near you, or through any of our approved collection partners’ shops or their online payment methods.

LOAN REPAYMENT TERM

The maximum repayment duration for the loan is 30 years, but it should not surpass the difference between the primary borrower’s age of 70 and his or her current age.

INSURANCE

Pag-IBIG Fund Housing Loan is covered by a Mortgage Redemption Insurance (MRI) or a Sales Redemption Insurance (SRI) as well as a Fire and Allied Perils Insurance (FAPI).

COLLATERAL AND LIMITATIONS

The housing loan accepts Clean Title (TCT/ OCT/ CCT) as collateral. While the following are the limitations of the housing loan application:

Less than 28 sq. m. lot area
Less than 18 sq. m. condominium floor area
Properties with road right of way less than 1.5 meters
Land types classified other than residential use
Residential buildings must be compliant with the National Building Code, PD958 or BP220

Visit ALL PROPERTIES for properties under-recognized developers and authorized by the Pag-IBIG Fund and bank financing.